The document discusses the evolution of over-the-top (OTT) and multi-network video services, emphasizing the challenges and complexities faced by traditional pay-TV operators in adapting to a fragmented device market. It highlights the diverging interests of content providers, operators, and device manufacturers, and points out the need for effective relationships and security management across different platforms. Conclusively, it notes that while initiatives like Ultraviolet aim to streamline these relationships, the business models are still in development.

1. OTT and TV
Everywhere –
What is Happening?
Adriana Menezes Whiteley
Head of Strategy Consulting
farncombe

2. What We Will Address Today
Multi-network, multi-screen video services
are now becoming “must have” features…
But...
What does it take to put together a truly
innovative and comprehensive solution to
extend the reach of your traditional pay TV
services?
2

3. About Farncombe
Our People Our Practices
 We are specialised in media  Strategy
and telecommunications  Technology
 Our team combines sector  Programme Management
knowledge, analytical skills
 Content Security
and technical expertise
 System Integration
 Our senior management has
practical, executive experience  Engineering Services
in the industry  Test & Certification
 User experience design
Our Clients
 Broadcasters, Pay-TV & Telecom Operators
 Silicon and CPE Vendors
 Middleware & Conditional Access Vendors
 Content Providers
 Head End and Multiplex Manufacturers

4. OTT Video Introduces Complexity
The device market for over-the-top video is fragmented,
and not controlled by the platform operator
Content Owner/ Platform Reception
Distribution
Aggregator operator
Software Hardware
Limited number of
devices. 1 CA
System, 1 Traditional Pay TV Operator
middleware provider
on each network
e.g.
e.g. Lovefilm, TV, PC,
Warner, BBC etc ISP Android,
Netflix, Hulu STB
Adobe
Multiple
Aggregator/ Broadband devices: STBs,
Platform provider provider has direct TVs, tablets,
has direct relationship with mobiles, PS3, etc
Multiple environments/
relationship with client
middleware, OS
client
Player/ DRM controlled
by Platform operator
Source: Farncombe 4

5. Players Have Diverging Interests
Providers depend on devices implementing security correctly,
and maintaining all device models secure
Device manufacturers
 Sell new hardware
 Limit costs of updates/ maintenance
 Use content as competitive
differentiation
Content Owners
OTT Platforms
 Limit piracy  Make content available
 Monetise release OVER-THE-TOP on multiple devices
windows VIDEO with minimum
 Increase value of long- customisation
tail  Secure early windows
Consumers
 Want content everywhere and
hassle-free – one or no
password, centralised customer
relationships
Source: Farncombe

6. And how are
pay TV operators
reacting?
6

7. TV Industry is Becoming Polarised
Content-
focused
Free-to-Air
Broadcasters
< 2011
Pay TV operators
Infrastructure
focused
Horizontal Proprietary
devices devices
Source: Farncombe 7

8. TV Industry is Becoming Polarised
Content-
focused
FTA
Broadcasters 2011
Pay TV
(Mostly DTH)
operators
Pay TV operators (Mostly Cable
and IPTV)
Pay TV
Infrastructure operators
focused
Horizontal Proprietary
devices devices
Source: Farncombe 8

9. Gateways vs. Multi-Network
Examples OTT/ Media Gateways Examples Multi-Network Services
Source: Farncombe Analysis

10. But what are the
challenges?
10

11. Reaching Multiple Devices
H.264 Adaptive
1,500
VP8 Kbps
WMV 800 Kbps
…. ….
Which Which Video Which Video Which Bit
Device? Player? Format? Rate?
Source: Farncombe

12. How about Long-term Support?
2010 2011
Source: Farncombe 12

13. Challenges for Media Gateways
Source Prepare and store Distribute content End-device
content content functionality
Storage and Security Distribution Physical
User Device
and DRM interface / mgt.
transcoding protocol network experience
How to
Does content replicate the
need encrypting functionality How to
or to have DRM of the manage the
added? gateway end-device?
device?
 There are technologies
 Content security is a major which allow third-party
 Operators want to make
issue for home gateway devices to receive operators’
content available to third-
solutions offering premium content, but the exact
party devices, but retain
content over 3rd-party functionality and UI is
some control
devices determined by the device
manufacturer
Source: Farncombe
13

14. Conclusion
• Premium, OTT, multi-device content relies on
correct implementation and maintenance
processes by hardware manufacturers
• A fragmented base of devices makes it harder to
ensure a secure environment
• The problem is not technical – relationships
need to be adjusted to the new required chain of
trust
• Initiatives such as Ultraviolet and TV Everywhere
in the US aim to create entities to manage these
relationships – but it is still early stages and the
business model needs to be proven 14

15. Thank You
adriana.whiteley@farncombe.com
www.farncombe.com